Georgia Power recommends Vogtle completion

31 August 2017

Georgia Power has today filed a recommendation with the Georgia Public Service Commission (PSC) to complete construction of Vogtle units 3 and 4 as the most economic choice for customers. The company expects unit 3 to begin commercial operation in November 2021 and unit 4 in November 2022.

Vogtle 3 and 4, pictured in July (image: Georgia Power)

The recommendation, which is supported by the project's co-owners, was made following assessments made after contractor Westinghouse filed for bankruptcy protection in March. These included economic analyses; evaluation of alternatives including abandoning one or both of the AP1000 units or converting them to gas-fired generation; and assumptions related to potential risks including future payments from Toshiba as well as the availability of production tax credits and the extension of federal loan guarantees.

"Based on all factors considered, completing both units represents the most economic choice for customers and preserves the benefits of carbon-free, baseload generation," the company said. The total rate impact of the project remains less than originally estimated, it said.

The Vogtle project is majority owned by Southern Company subsidiary Georgia Power (45.7%), with co-owners Oglethorpe Power (30%), MEAG Power (22.7%) and Dalton city (1.6%). The units will be operated by Southern Nuclear Operating Company.

Georgia Power said it had invested about $4.3 billion in capital costs in the project to June 2017 and estimates its cost to complete to be about $4.5 billion, bringing the company's total capital cost forecast to $8.8 billion. The PSC has already approved $5.68 billion in capital costs for Georgia Power's share of the project. With payments of $1.7 billion under parental guarantees anticipated from Toshiba, Georgia Power's potential additional capital costs are about $1.4 billion. Based on the new assessments, the total estimated capital cost forecast for the entire project is about $19 billion.

Georgia Power's recommendation will be reviewed by the PSC, which may approve, modify or reject the petition. The commission said it expects to do this by mid- to late-February 2018.

Westinghouse CEO José Gutierrez said the company was "very pleased" with Georgia Power's decision. "Georgia Power's continued confidence in AP1000 plant technology strengthens their energy offerings and nuclear's role in America's infrastructure," he said.

Maria Korsnick, president and CEO of the US Nuclear Energy Institute, said Georgia Power's decision signalled a "new era" for nuclear energy in the USA and was a "shot in the arm" for on-site employees and contractors, and the national nuclear supply chain. She called for the US Senate to vote to lift the deadline for the nuclear production tax credit. Under current tax rules the units would need to be brought on line before 1 January 2021 deadline to qualify for credits. "The Vogtle reactors are a national asset that we can ill afford to lose, and the Senate must act quickly to preserve a critical piece of our strategic infrastructure," she said.

Bechtel appointment

Project management and control at the Vogtle site transitioned to Southern Nuclear after a services agreement between Westinghouse and Vogtle's co-owners became effective on 27 July. Georgia Power announced today it has contracted with Bechtel to manage daily construction efforts under the direction of Southern Nuclear.

"We have seen a marked increase in productivity throughout this year, with the best improvement being the most recent improvement, and our experience provides every indication that we can do a better job than Westinghouse alone as we move forward to complete the project," Georgia Power president and CEO Paul Bowers said. "Since Southern Nuclear assumed control of the site from Westinghouse at the end of July, momentum has accelerated with a consistent focus on safe, high-quality construction. We expect this trend to continue with Bechtel."

Construction of Vogtle unit 3 began in March 2013 and unit 4 in November of that year. The units will be the first in the USA to use AP1000 technology following the announcement earlier this month by Scana Corporation subsidiary South Carolina Electric & Gas of its decision to cease construction of two AP1000 reactors at VC Summer.